Charity lotteries have warned the government that a proposed gambling levy could prevent funds of up to £1m per year from going to good causes.
Society lotteries, like the People’s Postcode Lottery, are anticipating to pay 0.1% from their gross yield under the proposed statutory levy on gambling operators.
The proposals established under the previous Conservative government aimed to raise funds for research, prevention and treatment of gambling-related harms including via the GambleAware charity.
It was set to be introduced via secondary legislation this year but charity lotteries have expressed concerns about its effect.
A spokesperson for People's Postcode Lottery told Civil Society: “People’s Postcode Lottery share the concerns of the wider charity lottery sector.
“The government’s mooted ‘charity tax’ would serve only to diminish the funds our players so generously raise for good causes each and every year.
“It is fundamentally unfair for low-risk charity lotteries to be subject to a levy designed for high-risk commercial gaming and betting operators.
“We urge DCMS to confirm it will zero-rate charity lotteries and provide parity of treatment with the National Lottery, which will not be subject to the charge.”
‘Doubly unfair’
Lotteries Council chair Tony Vick said: “It is hugely disappointing that the low-risk charity lottery sector is set to subsidise the sort of gambling harms generated by commercial betting and gaming companies via what amounts to little more than a charity tax on civil society.
“The situation is doubly unfair given that the government has ruled out subjecting the National Lottery to the new levy.
“As a sector of charity fundraisers, we call on the government to see sense and urgently confirm a zero-rating for charity lotteries and deliver parity between our 500 plus operators and the much larger National Lottery.”
Lotteries Council public affairs chair Nick Cook said: “We hope that the government will axe this planned charity tax without delay.
“While the charity lottery sector accepts that we must be included within the levy framework, we have highlighted clear precedents to allow us to be zero-rated, a move which would safeguard the future charitable return of our member lotteries.”
Consideration from DCMS
In its consultation report, the Department for Culture, Media & Sport (DCMS) said: “We recognise that there are arguments to exclude society lotteries from the scope of the levy.
“However, as mentioned earlier, the power to introduce the levy is a blanket power and we are unable to exclude particular classes of licence holders, such as society lotteries, from the levy.
“In recognition of the low rates of harm associated with participation in society lotteries and the important benefits they bring to good cause fundraising, we are currently minded to charge the levy to society lottery licensees, including external lottery managers and local authority lotteries licensed by the Gambling Commission, at the lowest rate of 0.1%, subject to consultation.
“Furthermore, we are considering a suitable definition comparable to gross gambling yield that can be adjusted to take account of contributions to good causes.”
Civil Society has asked DCMS to comment.
